Pharmacists typically buy their own pharmacy because they like the freedom it gives them – they can run things the way they want. If you are considering such a move, however, there is a good deal of preparation involved. Here is a brief outline of some of the things you will need to do to get the process moving.
Choose a Method for Determining Which Pharmacies Are for Sale.
You won’t see any “for sale” signs in the parking lot. There are a number of ways to determine what pharmacies are up for sale – using a vendor who has a proprietary database, sales listings on pharmacy association websites, using a pharmacy broker, word of mouth. Find a method that works best for you.
Put Together a Team of Advisors.
Your team should include someone who knows about buying and selling pharmacies, an accountant, an attorney, a financial advisor, and a pharmacy owner.
Determine Your Financing Options
These include a conventional loan, a Small Business Administration loan, a loan from a pharmaceutical supplier, or a personal loan from family or friends.
Choose a Pharmacy
Things to look at when choosing a pharmacy to buy include its profitability, whether the revenue is growing or declining, how much you can grow the business, the savings you can make, the volume and mix of prescriptions, the payer makeup for the patients, what long-term care contracts are in place, etc.
Go over each financial statement very carefully, paying attention to each line.
Closing the Sale
There are five steps to this process: Valuation, negotiation, contracting, financing, closing.
Valuation is how much the pharmacy is worth, and there are a number of things that go into determining this, including prescription volume, market share, cash flow, debt, profit, property and inventory value.
The next step is negotiating with the seller on the price. Here you want to show the seller how you came up with your price, if you don’t agree.
Contracting is signing a letter of intent to buy with a closing date. You should be able to operate under the previous owner’s license until you can reenroll in health plans.
In financing, remember to consider all your options. Closing is the transfer of ownership. You will also need to transfer reimbursement contracts, supplier agreements and licenses.
Naturally, there are many more details involved in each step, but this should give you some idea of what you will face, if you are considering such a purchase.
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